Read Now Maximize Your Earnings With a Health Savings Account MOBI
Health Savings Accounts Explained (Updated for 2021)A Health Savings Account could be a good choice to help you save money. It allows you to use tax-free dollars to pay for your out-of-pocket medical expenses, plus a whole lot more. Find out now if a Heath Savings Account (HSA) is right for you, so you'll be ready for open enrollment—your next opportunity to choose a High Deductible Health Plan (HDHP).A High Deductible Health Plan?Enrolling in a HDHP is a requirement for investing in a Health Savings Account. Only in the years you choose a High Deductible Health Plan will you be able to contribute and invest in your HSA and enjoy all of the tax benefits outlined below. You can fund it every year up to the HSA contribution limits.For 2020, that's $3,550 for self-only coverage or $7,100 for family plans. If your HSA is part of your employer's health insurance and you're lucky, your employer could even kick in a few bucks on your behalf. Unlike similar employer-run Flexible Spending Accounts, however, all unused amounts roll forward to future years.The reason I get so excited about HSAs is because it gives you a quadruple tax break. Why not take advantage of every tax break your Uncle Sam affords? With healthcare costs only going higher, it can be a smart choice.Get a Quadruple Tax Break!Tax Break #1 – Your contribution is deducted from your gross income for the year. This saves you on yearly taxes, plus lowers your AGI.Tax Break #2 – Upon qualified distribution you won’t pay tax on that contribution. That’s better than pre-tax or traditional contributions where you get the tax deduction but have to pay taxes on it when you take it out.Tax Break #3 – You won’t pay tax on your earnings upon qualified withdrawal. With a traditional IRA contribution, you get a tax deduction but have to pay tax on the contribution and earnings when you take it out. With a Roth investment, you don’t get a tax deduction but enjoy tax free earnings. With an HSA you get it all!Tax Break #4 – Your final tax break is realized only if you make your contribution via payroll deduction through your employer. Your employer will not deduct payroll taxes from your contribution, saving you another 7.65% on your contribution.What’s a Qualified Distribution? – A qualified distribution means it’s reimbursement for IRS-approved medical expenses that you, your spouse, or other dependents incurred. This is true even if your spouse/dependents are on a different medical plan and includes:your own medical expensesspouse’s medical expenseslong term care expenseslong term care insurance premiumsMedicare premiums A,B & D (once you reach Medicare age)Plus, once you reach age 65, you can withdraw money for non-medical reasons without penalty and spend it any way your wish (although you will owe tax on those distributions). Or, leave it in there to protect against the possible need for Long Term Care.Maximize Your EarningsWant even more advantages? Leave some, most or all of your HSA contributions, employer contributions, and accumulated earnings alone and invest them for the long term. Pay for some, most or all of your medical expenses out-of-pocket throughout your working years, and let the most powerful of all the tax-advantaged accounts compound and grow. If done right, you’ll have some serious bank come retirement.Strengthen Your Financial FutureOpening and contributing to an HSA is one of the smartest financial decisions you can make. Maximize Your Earnings with a Health Savings Account has all the details. Start strengthening your financial future now by clicking on the “Buy” button at the top of the page.
